GAO Warns That Courts
Could Redefine Contracts

By

Tom Doggett and

Jeffrey Taylor Staff Reporters of The Wall Street Journal

Updated Sept. 5, 1996 12:01 a.m. ET

WASHINGTON -- Some of today's innovative grain contracts run the risk of being defined as futures by the courts, which would make them illegal and unenforceable, according to the General Accounting Office.

The warning about so-called hedge-to-arrive contracts is contained in a draft report by the GAO, the auditing arm of Congress, on how the federal commodities-trading law has basically become ineffective in regulating futures...